Check your company car tax rate

The latest company car tax rates apply from 6 April 2017 - find out how much you'll pay if you drive a company car...

Claire Evans

29 July 2016

Company car tax is designed to encourage business drivers to choose cars with lower CO2 emissions, so the amount payable rises on a sliding scale in line with emissions.

Historically, this has contributed to a big increase in the number of diesel cars on UK roads – around half of new cars registered each year are now diesels, compared with only 20% 10-15 years ago. However, it’s also helped to encourage the adoption of hybrid and electric vehicles among corporate drivers.

In 2015, the Government introduced legislation that gradually increases company car tax rates between 2015 and 2020, so that they continue to encourage drivers to choose cars with the lowest emissions.

At the same time, a 3% surcharge was introduced for diesel-engined cars to take into account their higher level of particulates, such as NOx. From 1 April 2018 this surcharge will increase from 3% to 4%.

To promote ultra low emission vehicles (ULEVs), they benefit from reduced rates of company car tax. Electric vehicles attract a rate of 7% in the 2016-2017 tax year, rising to 9% from April 2017.